Aurora condos are typically the best cash flowing investment properties in the current Denver metro real estate market. Our clients picked up their third rental property in Aurora. This is a great property because it’s fully remodeled and ready to go.
There is a relatively easy value-add play of turning a second living room into a fourth bedroom by adding a door and some drywall work. More bedrooms = more rental income.
Investor Profile
- Business owners looking to build a rental portfolio for long term retirement planning
- Also wanted diversification from the stock market
- Fast decision makers, which helped them win this deal
- Listen to the podcast "#158: Deal Analysis - Aurora Rental Condo With Value Add Play" on the Denver Real Estate Investing Podcast
- Watch the YouTube video (at the bottom.)
- Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.
Deal Quadrant: MLS
Read about the deal quadrant and finding Denver Rental Properties.
Investment Property Details
- Type: Condo, End Unit
- 3 bedroom, 2 bathroom
- Location: Aurora
- List Price: $259,973
- Purchase Price: $259,000
- Why we liked it:
- 3 bedroom, but 4th bedroom buildout
- Fully remodeled, rent ready
- End unit
- Near the pool
Property Contract Details
- Finding the property: Team and clients were watching MLS searches for potential rental properties. This condo popped up. It looks great and in a complex we like. We acted fast, wrote a strong offer and tight contract. Clients moved quickly which helped us win it.
- Under contract: Under list price and quick close.
- Inspection Concerns:
- None
- Inspection negotiation outcome:
- None
Property Financing Details
- Lender: Conventional
- Loan Type: 25% down conventional
- Appraisal: Above list price!
- Seller Concessions: 0
- PMI: None – 25% down
- Interest Rate Buy Down?: No
Spreadsheet Analysis
Property Operating Expenses
First Year Returns
Conclusion
Since this condo is a high quality (not a ”lipstick on a pig”) remodel, this rental should have minimal repairs for the first few years. It’s a great Aurora complex which will always be in high demand from both renters and first-time buyers.
The investors have the option of keeping it as a rental (and increasing cash flow with a fourth bedroom) or potentially selling it in 5 to 7 years to maximize their return on equity by trading up into a bigger and better rental property.
Either way, it’s a great long term investment! We’ll sit down with our clients on a regular basis to help them determine the best plan for this property based on the market and their needs.
Video: Deal Analysis - Aurora Rental Condo With Value Add Play
Podcast: Play in new window | Download (Duration: 15:14 — 17.4MB)
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